The report noted the growing use of the internet for cyber spying and attacks by government and allied groups. Targets include critical national infrastructure network systems such as electricity, air traffic control, financial markets, and government computer networks.

As many as 120 countries are using the internet for espionage. The most high profile cyber-attack this year was thrown against the national infrastructure of Estonia. Cyber assaults in general have become more sophisticated over recent months, featuring techniques designed to slip under the radar of government cyber defences.

Western governments have pointed the finger of blame for targeted Trojan attacks towards China, which has denied any involvement in the assaults.

According to NATO insiders, cited by McAfee, many governments are ill-prepared to fend off cyber-attacks. These insiders believe the attack on Estonia, which disrupted government, news, and bank servers for several weeks, is just the tip of the iceberg in cyber warfare.

"Traditional protective measures were not enough to protect against the attacks on Estonia's critical national infrastructure. Botnets, unsurprisingly, were used but the complexity and coordination seen was new. There were a series of attacks with careful timing using different techniques and specific targets. The attackers stopped deliberately rather than being shut down," a NATO informant told McAfee.

McAfee reckons attacks have progressed from "curiosity probes to well-funded and well organised operations for political, military, economic and technical espionage".

"Cybercrime is now a global issue," said Jeff Green, senior vice president of McAfee Avert Labs and product development. "It has evolved significantly and is no longer just a threat to industry and individuals, but increasingly to national security. We're seeing emerging threats from increasingly sophisticated groups attacking organisations around the world. Technology is only part of the solution, and over the next five years we will start to see international governments take action."

McAfee notes a trend towards more sophisticated threats to personal data and online services more generally. It predicts the emergence of threats akin to the Storm worm, that can be modified over and over again like "recombinant DNA".

The security giant also reckons cybercriminals will look for ways to exploit the popularity of applications on social networking sites such as MySpace and Facebook. Voice over IP (Internet Protocol) technologies will be used as a technique for making phishing attacks more convincing, McAfee predicts.

The underground economy in malware and exploit sites already includes specialised auction sites, product advertising, and even support services. Customer service has become a differentiator among denizens of the digital underground. McAfee reports that with increased competition the cost of renting a platform for spamming has dropped. Criminals can now buy custom-written Trojans built to steal credit card data, it adds. ®